The business-for-sale market is just as frustrating for buyers as it is for sellers these days. Although there are plenty of entrepreneurs who want to buy a personal services business, capital restrictions are holding them back.
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If you're ready to move on, now is the right time to sell your personal services business.
In a personal services business sale, pricing is based on a number of factors, including the costs incurred during the sale. Good brokerage takes a 10% success fee off the top of the final sale price. Attorneys, accountants and appraisers work for a flat fee that can range from hundreds to thousands of dollars. Furthermore, your time has value, so you may need to include a personal compensation consideration in your expense estimates.
There is a lot of work that needs to be done before you're ready to sell your personal services business. Perhaps the most important pre-sale consideration is to right-size your expectations to the realities of the market. Once your expectations are in the ballpark, you can move on to making your business presentable to prospective buyers.
Selling a Personal Services Business to an Employee
Employee sales have pros and cons. A faithful employee may have the motivation and ability to continue to operate the business. The time and expense of locating the right buyer will be nonexistent and you won't have to spend weeks showing the buyer every square inch of the company. Yet most employees lack the means to buy their employer's business at or near the asking price. Seller financing is one way to get around the capital deficit of an employee-based personal services business sale, as long as you are willing to vet the employee's credit worthiness the same as any other buyer.
Ready to learn more? You may find these additional resources to be of interest.
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